Potential Savings Could Double if More Consumers & Public & Private Payors Utilize Benefit

Lewin Study-Mail-Service Pharmacy Savings

(Washington, DC)—The mail-service pharmacy option is projected to save consumers, the Medicare program, and health insurance plans in the commercial marketplace at least $85 billion on prescription drug costs over the next ten years, according to a new study conducted by the Lewin Group and released today by the Pharmaceutical Care Management Association (PCMA).

The data also suggest that consumers, the Medicare program, and private plans are not taking full advantage of the cost savings available through mail-service pharmacies. Currently, about 20 percent of prescription drug expenditures flow through mail-service pharmacies. Lewin estimates that as much as 50 percent of prescription drug expenditures would flow through mail-service pharmacies if they were utilized for all prescriptions used to treat chronic health conditions. If so, the cost-savings potential for consumers, Medicare, and private plans would nearly double over the next ten years to $167 billion.

“Mail-service pharmacies are an important tool providing consumers and payors with increased savings, convenience, and safety,” said PCMA President Mark Merritt. “If utilized to its full potential, the mail-service pharmacy option could save consumers, Medicare, and health plans as much as $167 billion in prescription drug costs by 2016. All consumers—particularly the chronically ill and seniors—should take advantage of this proven cost-saving tool and maximize their prescription drug benefits. Study after study shows high consumer satisfaction with the mail-service pharmacy option.”

The mail-service pharmacy option is an important tool for individuals managing chronic conditions. While patients with short-term acute-care needs typically receive 30-day prescriptions in the retail pharmacy setting, patients with chronic conditions such as hypertension, high cholesterol, or heart disease can be better served by the 90-day option offered by mail-service pharmacies. The 90-day mail-service pharmacy option offers increased savings and, since medications can be delivered as each fill ends, helps consumers better comply with their prescription regimen. The home-delivery feature of mail-service pharmacies is of particular importance to frail elderly and disabled individuals with limited mobility. Mail-order pharmacies have pharmacists available over the phone 24 hours a day to assure consumers the ability to ask and get the answers for any questions they may have about their medications.

Among the Lewin study’s key findings:

Prescriptions dispensed through mail-service pharmacies are estimated to cost approximately 10 percent less than equivalent retail pharmacy prescriptions.

At current trends, mail-service pharmacies are projected to save consumers, Medicare, and health insurance plans in the commercial marketplace $85 billion by 2016. These savings figures include $47.9 billion for Medicare and $37.5 billion for private health plans.

If used to their full potential, mail-service pharmacies could save as much as $167 billion for consumers, Medicare, and private health plans by 2016.

Policy proposals that would erode the mail-service pharmacy option will substantially increase costs. Taken together, three policy proposals â?? an “any willing mail-service pharmacy” mandate, uniform cost-sharing requirements, and a 90-day retail requirement â?? would increase costs to consumers, Medicare, and private health plans by 6.1 percent, or $47 billion over the next ten years.

For Medicare beneficiaries, the mail-service pharmacy option could be particularly helpful in lowering drug costs and expanding access. Fully 85 percent of seniors regularly take prescription drugs to treat an on-going health condition, with more than two-thirds of them taking three or more drugs on a daily basis. A PCMA analysis recently found that increased use of generic drugs and the mail-service pharmacy option can delay beneficiaries’ entry into the Medicare Part D “donut hole” coverage gap by an average of 74 days â?? or even help them avoid it altogether.

“Placing requirements or other limitations on drug benefit design limits the ability of plan sponsors to encourage consumers to utilize mail-service pharmacies to their full potential and will likely increase prescription drug costs,” said Dorothy Moller-Tiger, Vice President, the Lewin Group.

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PCMA is the national association representing America’s pharmacy benefit managers (PBMs), which administer prescription drug plans for more than 200 million Americans with health coverage provided through small businesses, Fortune 500 employers, health insurers, labor unions, and Medicare.

Contact Information:
Phil Blando, 202-207-3614
Charles Coté 202-207-3605